Poorly prepared applications could prove costly for intermediary sector

The days when lenders would continue to overlook poorly prepared applications are coming to an end, specialist mortgage advisers Fluent Mortgages has warned.

The firm, part of Fluent Money Group, said that improvements in technology could persuade more lenders to ‘pursue a greater online and direct to consumer strategy’, rather than continue with the costs associated with badly-presented cases from the intermediary sector.

Dan Payne, managing director at Fluent Mortgages, commented: “Lenders have complained in private for many years about the poor standard of decisions in principle (DIPs) and applications presented by adviser firms, but have written off the extra costs of dealing with such cases as part of the price of securing distribution.”

“Many choose not to make an issue because of increasing competition and the fear of losing cases to other lenders. Interestingly, some packagers, whose area of expertise is supposed to be case preparation, have been guilty of being just as poor.”

He said that online DIP and application portals have helped to cut down on omissions. However, the same technology will give lenders a stronger hand to reassess where they put their resources.

“The burden of business acquisition costs could begin to come down heavily against introducer sourced business, unless the standards of applications submitted improve from the broking community,” he added.

“Let’s not give lenders any more reasons to look elsewhere for distribution.”